How I Handle Risk as a Freelancer
Navigating the unknown
“Those who would give up essential liberty to purchase a little temporary safety, deserve neither liberty nor safety.”
―Benjamin Franklin
Welcome back to Grace Notes
Author’s Note: As I sat down to write this newsletter, it started to get very long. I’m going to stick to broad concepts in today’s publication. However, if you would like me to go more in depth, let me know and I can make this a miniseries!
I got it all wrong.
Starting in April 2022, as if by grand design, I began getting motion picture calls from two of the biggest contractors in LA.
I was hesitant at first, but by spring time 2023, I was finally living my dream life. I felt like I was IN. I was feelin’ myself as I saw my bank account begin to swell and my credits begin to stack up.
“It’s smooth sailing from here,” I thought.
WGA + SAG-AFTRA STRIKES
Shit. Well……this was unexpected.
Earlier this year, the WGA and SAG-AFTRA strikes put studio work on hold. My income has plummeted, and there is a noticeable change in the quality of work that’s available. My schedule went from jam-packed to startlingly empty.
Such is the risk of being a freelancer.
Let’s Talk About Risk
Life is unpredictable. When you live your life from email to email, paycheck to paycheck, gig to gig, you live a risky life.
In today’s newsletter, I’m going to highlight some of the risks of living life as a freelance musician. I’ll define each of them to the best of my ability. Finally, I will share how I’m personally working to mitigate each one.
You must survive in order to play the game.
Risks
Macroeconomic/recession risk
Reputation risk
Contractor risk
Macroeconomic & Recession Risk
The only constant in life is change.
Pandemics, international conflicts, failing fiscal policies, collapsing governments, climate change, the threat of nuclear war—they have the power to shift markets.
While you can’t control these economic risks, you can control your behavior. Be aware of them of these factors, but don’t let them paralyze you.
Understanding what’s going on in the world will give you clues for how to pivot. During the pandemic, I was recording at home more than I was recording in studios. Because I spent years producing content for social media, I could engineer, record, and mix my own sessions, enabling me to remotely provide value to new clients.
I even won a Grammy recording from my bedroom.
In my humble opinion, the best way to mitigate macroeconomic risk is by learning a diverse set of skills that compliment each other. Instead of thinking about your profession as a single skill, aim to acquire a portfolio of skills that, when correctly combined, make you vastly more unique and valuable to the marketplace. You skills must have an inherent synergy to produce a compounding effect.
I could go on and on about this, so let’s end our discussion of macro risk here. On a more practical level, the enemy you’re more likely to face is recession risk.
The business cycle is like the tide. Our capitalist economy booms and busts in a cyclical pattern.
When the economy is doing well, people throw extravagant weddings, parties, and events. People go to concerts, shows, and movies. Money is flowing.
Interest rates have a HUGE impact on many different businesses. Profit margins shrink, cost of capital goes up, and people begin tightening their belts by cutting costs.
When the economy isn’t going well, businesses spend much less. Fewer market actors demand live entertainment when their budgets shrink. Music and entertainment industries are the first suffer in recessions, and they’re the last thing to come back after a recovery.
What IS a recession, though? According to the International Monetary Fund (IMF),
“there is no official definition of recession, but there is general recognition that the term refers to a period of decline in economic activity. Very short periods of decline are not considered recessions.”
In America, economists have historically defined recessions as 2 consecutive quarters of negative growth in our country’s gross domestic product (GDP). In other words, when you add up all the economic transactions that take place in an economy, you get the GDP.
Okay okay, with the economics lesson. What does this have to do with artist entrepreneurship? How can we mitigate this risk??
Talk to all of your friends and family. Listen intently. You’ll eventually stumble upon common, evergreen pain points that people struggle with. Create solutions to these problems and you’ll find, economy be damned, that there is demand and you CAN serve others.
Like macroeconomic risk, you kinda have to take recession risk on the chin. Diversifying your revenue streams is critical during these times. Remember: cashflow is king.
Reputation Risk
If you suck as a person, you’re gonna have a bad time. I truly believe that people vastly discount the value of being an engaging, giving person.
Especially in the music world, there’s this notion that skill trumps all. If you’re the best player, you are automatically entitled to all the work, right?
Wrong. The first rule of business is that it’s about serving people. If you serve people with a negative attitude, unwanted criticism, arguments, tardiness, unprofessionalism, gossip, or insufferable arrogance, no amount of skill will compel people to want to work with you. Full stop.
In a forthcoming newsletter (should drop after next week’s letter), I will talk about how to make networking fun, energizing, and fulfilling. Stay tuned for that (and if you want a cheat sheet, READ THIS BOOK).
In summary, don’t be a dick and you should be okay.
Contractor Risk
Most musicians I know are w9 independent contractors. That means we are hired by music supervisors and ensemble contractors that serve the clients. We do not get employee benefits (in most cases).
This presents a few avenue of risk. Your contractor could:
lose a big client.
get in trouble with the Union and get blacklisted.
go out of business themselves.
retire.
So, how do I mitigate contractor risk?
I build relationships with a diverse portfolio of different contractors.
Some contractors specialize in musical theater. Some specialize in studio recordings. Even more of them specialize in live performances. Further still, there are different contractors that occupy the same industry silo, but they focus on specific genres. I do my best to be as versatile a player as I possibly can. This puts me in a unique position to provide value to many unique styles of music. The more versatile my skills, the more people I can serve!
Final Thoughts
I have so much more to say, but I think this newsletter is already too long. Let me know what you thought of it! If you have any topics you want me to research, get in touch with me!
Talk to you next Friday <3
-TVK
helpful! I always look forward to these